qualified local bus
(2) Reduction in refund in certain cases (A) In general Except as provided in subparagraphs (B) and (C), the rate of tax taken into account under paragraph (1) shall be 7.4 cents per gallon less than the aggregate rate at which tax was imposed on such fuel by section 4041(a) or 4081, as the case may be. (B) Exception for school bus transportation Subparagraph (A) shall not apply to fuel used in an automobile bus while engaged in the transportation described in paragraph (1)(B). (C) Exception for certain intracity transportation Subparagraph (A) shall not apply to fuel used in any automobile bus while engaged in furnishing (for compensation) intracity passenger land transportation— (i) which is available to the general public, and (ii) which is scheduled and along regular routes, but only if such bus is a qualified local bus. (D) Qualified local bus For purposes of this paragraph, the term “qualified local bus” means any local bus— (i) which has a seating capacity of at least 20 adults (not including the driver), and (ii) which is under contract (or is receiving more than a nominal subsidy) from any State or local government (as defined in section 4221(d) ) to furnish such transportation.